This comparison is between the Tython type Jedi and the Sith (opening cinematic.) THOSE Sith have both physical prowress and morals. The Tyton type Jedi have phyiscal prowress but no positive morals/emotions to counteract those that the Sith have.

I think they do.

I'm working on my 8th level 50 character. The Legacy window for Imperial classes is full for me, and I'm working on my Guardian now (though I got one up to level 40 before I deleted her at the server merges). The Sith, for the most part, seem to revel in evil. Most of them remind me of Snidely Whiplash. In fact, the Empire's entire military strategy on Quesh and Hoth just remind me of those old cartoons where the bad guys' entire point of existence is just to mess with the good guys for the mere purpose of messing with them. Seriously, most of the Sith in this game need to have long moustaches they can twirl while laughing evilly.

There are a few Sith characters that seem to go against this: Baras, Zash, Thanaton and Malgus are the most notable. But that's just like the Jedi: most of them are boring, staid characters with a few notable exceptions: Satele Shan, Orgus Din and so on.

As for morals? Well, the Sith Empire endorses slavery on a widespread scale, and, in fact, most of the slaves in the Empire are owned by the government. The Republic opposes slavery and has since its inception, since those who created the Republic still remembered their slavery at the hands of the Rakata. It's only one example, but the Empire can hardly take the high ground when it comes to morality.

What the Sith have is a persecution complex. They believe that the Jedi are responsible for all the bad things that have happened to them since the original darksiders that first met the Sith species were exiled form the Republic. They're partly right, considering what happened after the Great Hyperspace War. But, for the most part, it's this religious zealotry on the part of the Sith that tends to drive the Empire. That's they're real strength: they believe they've been wronged, and they believe they must eradicate those who wronged them.

I'll take the Order's morals any day over the Sith's. Individuals are different, however, and there are people across the spectrum on both sides.